\u201cThese issues are expected to resolve by financial year 2027, so we view the downgrade as largely one-off,\u201d the broker said.<\/p>\n
\u201cWhile this may have a short-term impact on new customer recruitment, current demand across its products remains strong,\u201d it added.<\/p>\n
The weaker earnings outlook reflected two shocks to a2 Milk\u2019s supply chain that have extended its time to market and limited its ability to rebuild in-market inventory: (1) constrained freight capacity and higher freight costs, and (2) more stringent testing requirements (following competitor recalls in early 2026).<\/p>\n
The broker said a2 Milk had de-rated to 29 times its 12-month forward price earnings ratio, slightly above its long-run average.<\/p>\n
\u201cA return to its recent elevated multiple is only likely once a2 Milk demonstrates these impacts are transitory,\u201d it said.<\/p>\n
Volatile interest rates<\/p>\n
Across the Tasman, Westpac said that with the supply shock from the energy market disruption likely to lead to higher inflation and higher interest rates, an expected slowing in economic growth would create a challenging environment for some customers.<\/p>\n
Commenting on its first-half result, due out on May 5, Westpac said its balance-sheet momentum was solid and its net interest margin was stable.<\/p>\n
But geopolitical uncertainty and the associated increase in market volatility had created interest rate volatility.<\/p>\n
The weaker Kiwi dollar would also be a factor as it brings back earnings from its New Zealand branch.<\/p>\n
The foreign currency translation from the 6% depreciation in the New Zealand dollar average exchange rate impacted both revenue and costs in the half, it said.<\/p>\n
In full flight<\/p>\n
In a note titled \u201cAirfare inflation in full flight<\/a>\u201d, Forsyth Barr said Air New Zealand\u2019s response to the fuel price crisis had been to moderately reduce capacity \u2013 predominantly on domestic and short-haul international routes \u2013 and to lift prices.<\/p>\n \u201cOur proprietary time series airfare data shows that quoted prices have increased materially in recent weeks, which will help soften the bottom-line impact from higher fuel costs, though will also dampen demand given elasticities,\u201d Forsyth Barr said.<\/p>\n \u201cThe net impact will be deeper losses than those incurred in the first half, adding pressure to Air NZ\u2019s balance sheet.\u201d<\/p>\n